{"id":169558,"date":"2024-08-29T11:26:30","date_gmt":"2024-08-29T10:26:30","guid":{"rendered":"https:\/\/opusllp.com\/restructuring-insolvency\/?page_id=169558"},"modified":"2024-11-28T09:33:38","modified_gmt":"2024-11-28T09:33:38","slug":"sequestration","status":"publish","type":"page","link":"https:\/\/opusllp.com\/restructuring-insolvency\/sequestration\/","title":{"rendered":"Sequestration"},"content":{"rendered":"\t\t
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Sequestration<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\t\t\t\tSequestration is form of Scottish insolvency that is designed to be used only as a final option when an individual is unable to meet their unsecured debt.<\/big>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\n\t\t\t\t\t\n\tContact Us<\/span>\n\t\t\n\t\t\n\t\t\t<\/i>\t\t\t\t\t<\/span>\n\t<\/span>\n<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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Personal debt, Bankruptcy & Sequestration<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Bankruptcy<\/a>\u00a0is referred to as\u00a0Sequestration in Scotland<\/a>\u00a0\u2013 both terms mean the same thing.<\/p>

For many individuals sequestration is deemed as a worst-case scenario, however it is an extremely useful and helpful procedure for those who are struggling with the stress of debt. \u00a0If it is not likely that an individual can pay debts in full, and another insolvency solution is not available to them, a sequestration may be the best option.<\/p>

In Scotland an individual can apply for their own sequestration by way of an application to the\u00a0Accountant in Bankruptcy<\/a>, or have sequestration forced upon them by a creditor petitioning the court.<\/p>

Once the sequestration is awarded, the Trustee (who administers the process of the sequestration) will take over all correspondence with creditors. Creditors will also be prohibited from raising any action against the individual and any charges\/interest would be frozen from the date of sequestration.<\/p>

If breathing space is required to allow an individual to apply for their sequestration or obtain further advice, a Moratorium can be applied for. The Moratorium is registered on a public register (the Register of Insolvencies) and stops creditors taking any action during the period being 6 months.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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What is the Sequestration process?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Sequestration can be a straightforward way to reset an individual\u2019s financial affairs and in most instances all debts and liabilities are written off when the individual is discharged after just 12 months.<\/p>

An individual can apply for sequestration when they are unable to pay their debts as they fall due. This is done by completing what is known as a Debtor\u2019s Application form, which is filed with the Accountant in Bankruptcy. Upon awarding the Sequestration, The Accountant in Bankruptcy will allocate the case to a Trustee to administer the estate.<\/p>

It is the Trustee\u2019s role to realise all of the assets of the estate to pay a dividend to creditors.<\/p>

A Trustee (a\u00a0qualified Insolvency Practitioner<\/a>) is appointed, who takes control of the individual\u2019s estate, which encompasses all assets owned or assets acquired by the individual within 4 years from the date of the sequestration. An affordable contribution may be payable from disposable income where appropriate, the value of this contribution is calculated using the common financial tool, which is used to assess household income and expenditure. This payment is made monthly over a period of 48 months and would be assessed every 6 months to ensure the payment remains affordable.<\/p>

Those subject to sequestration proceedings have a legal obligation to cooperate with the Trustee and will be subject to certain restrictions whilst they remain undischarged from the sequestration, which is usually 12 months. The restrictions of the sequestration do not generally affect the individual\u2019s day-to-day living however, they must be adhered to.<\/p>

Once the individual has received the discharge from the restrictions of the sequestration, their obligation to cooperate with the Trustee remains. The Trustee normally continues in office to allow the financial position to be monitored, monthly payments to be ingathered and realise assets.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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The pros and cons of Sequestration<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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The advantages<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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